Volatility: 3 ways to stay calm when the market is not

Healthy markets go up and down. But the sting of short-term losses might leave you feeling anxious. Here are some proactive ways to handle the emotions that can go along with saving for your retirement.

Don’t freak out … think about your long game.

Short-term market changes can stir up lots of feelings, and that’s totally normal. But here’s the thing: Markets may be volatile, but you don’t have to be. Your retirement goals are bigger than that. Think of your personal retirement savings strategy as you do dieting or quitting a bad habit—it’s step-by-step progress, and all about the long game. Make your investment choices based on that ultimate retirement date, not daily news about short-term market swings.

Make a reality check.

Markets gyrate. Or at least they do when they’re healthy. Rather than making knee-jerk decisions, counter your market-volatility anxiety with planful thinking. Even if you’re really stressed out, emotional decision-making may not meet your long-term goals. Log into your account and take a realistic look.

A diversified mix helps to ensure your account is aligned with your goals—the goal of diversification is to sell your higher performing investments and buy those that have historically not done as well. If your account has taken a dip, you can increase contributions to potentially help to make up for lower returns. If it’s the markets that dipped, you can now buy more with your money.

Set that rebalancing plan (PDF) and stick to it. Then add a regular date on your calendar (or set up automatic rebalancing online) to review your investment elections so you don’t get reactive every market flutter.

Talk to somebody who lives this stuff.

Whether you need to find an advisor or just touch base with your current one, put a date on your calendar right now for this conversation.

Actively appraising the value you’ve put into planning for your future will help you keep a cool head when the market heats up.

Want to learn more?

Find out how you can outsmart your emotions and make smart investment decisions.